WASHINGTON (dpa-AFX) - Cryptocurrencies whipsawed again with an overnight swing to the red zone amidst a hardening in bond yields, moderation in Fed rate cut expectations, strengthening of the dollar, uptick in gold prices, and a tech rout triggered by fears over frothy equity market valuations. The longest-ever shutdown of the U.S. government and the absence of official data to assess the strength of the economy also weighed on sentiment. The strong correlation between the tech sector and the cryptocurrency market exacerbated the declining trend in cryptocurrencies grappling with the implosion of a dollar-pegged stablecoin.
Mild inflows to Bitcoin and Ether Spot ETF products in the U.S. however limited losses.
Sentiment was impacted as markets digested reports of the implosion of stablecoin Elixir deUSD (DEUSD) pegged to the U.S. Dollar. The stablecoin de-pegged from the U.S. Dollar as it traded at a low of $0.02691 a few hours ago. Market capitalization of the stablecoin which was $96.7 million on Wednesday is currently at $4.8 million. DeFi liquidity provider Elixir has reportedly suspended support for its synthetic stablecoin, deUSD, after the ripple effects of Stream Finance's $93 million loss earlier this week. The protocol has reportedly already processed redemptions for 80 percent of deUSD holders.
With a market capitalization of $313.6 billion, stablecoins account for 9.3 percent of the overall crypto market.
Cryptocurrency market capitalization decreased 1.8 percent overnight to $3.37 trillion. The 24-hour trading volume increased 12 percent to $180 billion. 47 of the top 100 cryptocurrencies have gained more than a percent overnight whereas 24 cryptocurrencies including Bitcoin, Ethereum, XRP and Solana have declined more than 1 percent.
Data from Coinglass showed crypto liquidations - forced closure of a trader's leveraged position by an exchange or lending protocol for insufficient funds (margin or collateral) to cover potential losses - in the past 24 hours at $607 million comprising long positions of $395 million and short positions of $212 million.
The 6-currency Dollar Index which measures the dollar's strength against a basket of 6 currencies is currently at 99.79, versus 99.73 at the previous close.
Bond yields hardened across regions and tenors, weakening sentiment for cryptocurrencies. Yields on 10-year U.S. treasuries spiked 0.32 percent while ten-year bonds in Germany, France, U.K. etc surged more than 0.40 percent.
A moderation in rate cut expectations from the Fed also swayed sentiment. The CME FedWatch tool indicates a probability of 64.9 percent for a quarter-percentage rate cut in December. It was 69.6 percent a day ago.
Bitcoin Spot ETF products witnessed inflows of $240 million on Thursday as compared with outflows of $137 million on Wednesday. At the same time, Ethereum Spot ETF products recorded inflows of $13 million versus outflows of $119 million on Wednesday.
Wall Street Futures are trading close to the flatline. Benchmarks in Europe are trading below the flatline. Asian markets had closed on a mostly negative note.
Gold Futures for December settlement are currently trading at $4,011.95 per troy ounce, implying overnight gains of 0.52 percent. The yellow metal has gained close to 50 percent over the past one year.
Bitcoin has declined 2.2 percent overnight to $100,691.73, around 20 percent below the all-time high of $126,198.07 recorded on October 7. The original cryptocurrency recorded losses of 8.3 percent over the past week limiting year-to-date gains to 7.8 percent. The 24-hour trading ranged between $103,557.65 and $100,336.87.
Ethereum also dropped 3 percent overnight to trade at $3,279.79. Losses till date in 2025 stand at 1.6 percent. Ether's current trading price is 34 percent below its all-time-high. The 24-hour trading ranged between $3,412.03 and $3,245.28.
4th ranked XRP dropped 4.5 percent overnight reducing its current trading price to $2.19.
5th ranked BNB however added 0.4 percent overnight resulting in price increasing to $954.98.
The price of 6th ranked Solana decreased 2.3 percent overnight to $154.70.
TRON ranked 8th overall declined 0.55 percent overnight and is currently changing hands at $0.2854.
9th ranked Dogecoin rallied 1.3 percent overnight and is currently changing hands at $0.1648. DOGE has lost more than 47 percent till date in 2025.
10th ranked Cardano gained 0.72 percent overnight to trade at $0.5383.
50th ranked Filecoin (FIL) topped overnight gains with a surge of almost 70 percent. 28th ranked Internet Computer (ICP) also rallied 33.4 percent overnight.
96th ranked Decred (DCR) topped overnight losses among the top 100 cryptocurrencies with a decline of 16.4 percent. 89th ranked SPX6900 (SPX) also erased more than 7 percent.
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